PennyMac Financial Services, Inc. Reports Second Quarter 2026 Results

WESTLAKE VILLAGE, Calif.--( BUSINESS WIRE)--PennyMac Financial Services, Inc. (NYSE: PFSI) today reported net income of $22 million, or $0.41 in diluted earnings per share (EPS), on total net revenues of $497 million for the second quarter of 2026. Adjusted net income was $74 million, or $1.39 in adjusted diluted EPS, on adjusted net revenues of $566 million 1. PFSI’s Board of Directors declared a second quarter cash dividend of $0.30 per share, payable on August 27, 2026, to common stockholders of record as of August 17, 2026.

CEO Commentary

“PennyMac Financial generated a 2% annualized return on equity and a 7% annualized adjusted return on equity 1 in the second quarter,” said Chairman and CEO David Spector. “While our operational execution remained solid, our results fell short of expectations due to higher interest rates during the period. As a result, we are actively taking steps to realign our cost structure to enhance profitability.”

Mr. Spector continued, “Additionally, ongoing investments in technology are providing the structural leverage required to streamline our production division and lower our cost-to-produce without compromising capacity or the customer experience. Importantly, our recapture rates improved meaningfully in the second quarter, positioning us to capture significant upside when the origination market expands. As we onboard Cenlar’s subservicing portfolio, our tech-enabled efficiency and massive scale are expected to allow us to realize substantial operating leverage. We believe this fee-based revenue stream is a key component that will help us achieve our long-term ROE targets.”

The table below highlights key financial performance metrics 1:

($ in millions except per share metrics)

2Q26

1Q26

2Q25

Q/Q

Y/Y

Total net revenues

497

545

445

(9)%

12%

Net income

136

(74)%

(84)%

Diluted EPS

0.41

1.53

2.54

(73)%

(84)%

Annualized return on equity (ROE)

14%

(6)%

(12)%

Adjusted net revenues

566

589

537

(4)%

Adjusted net income

118

124

(37)%

(40)%

Adjusted diluted EPS

1.39

2.19

2.31

(37)%

(40)%

Annualized adjusted ROE

11%

13%

(4)%

(6)%

Book value per share

83.49

83.31

78.04

Cash dividends declared per common share

0.30

Key Operating and Financial Metrics

Business Highlights

Guidance

____________________

1 Items labeled as “adjusted” are non-GAAP financial measures. See pages 9 and 10 for a reconciliation of GAAP net income to adjusted net income, adjusted diluted EPS and annualized adjusted return on equity, as well as for a reconciliation of GAAP total net revenue to adjusted net revenues.

2 See page 9 for a reconciliation of GAAP net income to annualized adjusted return on equity

3 Presented net of loan origination expense

Production Segment Highlights

The table below highlights key operating metrics and financial performance in the production segment:

2Q26

1Q26

2Q25

Q/Q

Y/Y

Volume ($ UPB in billions)

Total fallout adjusted locks

31.5

38.0

38.6

(17)%

(18)%

Consumer Direct

4.5

6.6

2.4

(32)%

87%

Broker Direct

6.5

7.1

5.4

(8)%

21%

Correspondent

20.5

24.3

30.8

(16)%

(33)%

Total acquisitions and originations

34.9

37.0

37.9

(6)%

(8)%

Government loan first lien refinance recapture rate (1)

59%

50%

44%

15%

Conventional loan first lien refinance recapture rate (1)

29%

22%

17%

12%

Profitability ($ in millions)

Revenues (2)

243

327

211

(26)%

15%

Expenses (2)

205

194

153

34%

Pretax income

134

(71)%

(33)%

Revenues (2) as basis points of fallout adjusted locks

(9)

Pretax income as basis points of fallout adjusted locks

(23)

(3)

May not sum due to rounding

(1) Numerator = UPB of new consumer direct first lien refinance originations for existing portfolio customers; denominator = UPB of payoffs with no transfer of title or MLS listing identified

(2) Presented net of loan origination expense

Consumer direct fallout adjusted lock volumes were $4.5 billion in UPB, down from $6.6 billion in the prior quarter and up from $2.4 billion in the second quarter of 2025. The decrease from the prior quarter was driven by lower refinance volumes due to higher rates, and the increase from the second quarter of 2025 was driven by increased refinance activity and higher refinance recapture rates. Broker direct fallout adjusted lock volumes were $6.5 billion in UPB, down from $7.1 billion in the prior quarter and up from $5.4 billion in the second quarter of 2025. The increase from the second quarter of 2025 was driven by market share gains and a larger origination market. Correspondent fallout adjusted lock volumes were $20.5 billion in UPB, down from $24.3 billion in the prior quarter and $30.8 billion in the second quarter of 2025, both as a result of a highly competitive environment.

Production segment pretax income was $38 million, down from $134 million in the prior quarter and $58 million in the second quarter of 2025.

Revenues net of loan origination expenses were $243 million, down from $327 million in the prior quarter and up from $211 million in the second quarter of 2025. The decline from the prior quarter was primarily driven by lower volumes in the consumer direct and correspondent channels, and a $36 million adverse shift in post-lock impacts driven by market price changes on specialized pools and other cross-channel impacts.

Expenses net of loan origination expenses were $205 million, up from $194 million in the prior quarter and $153 million in the second quarter of 2025. The increase from the prior quarter was due to higher capacity and funded unit volume in the consumer direct lending channel.

Servicing Segment Highlights

The table below highlights key operating metrics and financial performance in the servicing segment:

2Q26

1Q26

2Q25

Q/Q

Y/Y

Servicing portfolio

Total UPB ($ in billions, at period end)

731

720

700

Owned servicing

488

474

463

Subservicing

235

237

230

(1)%

Loans held for sale

(22)%

13%

Actual CPR (owned portfolio)

11.6%

13.7%

8.5%

(2.1)%

3.1%

60+ Day Delinquency (owned portfolio, at period end)

4.1%

4.2%

3.2%

(0.1)%

0.9%

Profitability (in millions) (1)

Loan servicing fees

536

532

507

Earnings on custodial balances and deposits and other income

119

105

116

13%

Realization of mortgage servicing rights (MSR) cash flows

(323)

(355)

(263)

(9)%

23%

EBO loan-related income (2)

15%

Revenues excluding valuation-related items

369

316

392

17%

(6)%

Operating expenses

(6)%

(2)%

Payoff-related expenses (3)

(8)%

66%

Credit losses and provisions for defaulted loans

13%

19%

Interest expense

140

125

130

12%

Expenses excluding valuation-related items

270

260

246

10%

Pretax income excluding valuation-related items

146

75%

(32)%

MSR fair value changes

118

183

N/M

Hedging results (4)

(187)

(221)

(112)

N/M

(Provision for) reversal of losses on active loans

(8)

(6)

N/M

Valuation-related items

(77)

(44)

(92)

N/M

Pretax income

71%

(60)%

May not sum due to rounding

(1) Non-GAAP presentation - see pages 10 and 13

(2) Includes EBO related revenues and associated expenses

(3) Includes interest shortfall and recording and release fees

(4) Includes principal-only stripped MBS valuation-related accretion changes included in net interest income in the GAAP presentation

The owned servicing portfolio totaled $488 billion in UPB at June 30, 2026, up 5% from June 30, 2025 as additions from production more than offset runoff from prepayments.

Servicing segment pretax income was $22 million, up from $13 million in the prior quarter and down from $54 million in the second quarter of 2025. Servicing segment pretax income excluding valuation-related items was $99 million, up from $57 million in the prior quarter and down from $146 million in the second quarter of 2025.

Servicing revenues excluding valuation-related items totaled $369 million, up from $316 million in the prior quarter and down from $392 million in the second quarter of 2025. The increase from the prior quarter was primarily due to lower realization of MSR cash flows, reflecting lower prepayment speeds, and an increase in earnings on custodial deposits and other income due to higher average balances. The decrease from the second quarter of 2025 was primarily due to higher realization of MSR cash flows from increased runoff partially offset by increased loan servicing fees.

Servicing expenses excluding valuation-related items were $270 million, up from $260 million in the prior quarter and $246 million in the second quarter of 2025. The increase from the prior quarter was primarily due to higher interest expense due to higher average balances of outstanding financing for MSRs. The increase from the second quarter of 2025 was primarily due to higher interest expense, payoff-related expense, as well as losses and provisions for defaulted loans.

MSR and hedging-related losses were $77 million, compared to $44 million in the prior quarter and $92 million in the second quarter of 2025. These losses included $52 million in hedge costs, compared to $14 million in the prior quarter and $54 million in the second quarter of 2025.

Corporate and Other

Pretax loss from corporate and other was $29 million, compared to $42 million in the prior quarter and $35 million in the second quarter of 2025.

Revenues were $23 million, up from $13 million in the prior quarter and $12 million in the second quarter of 2025, both primarily due to a non-recurring gain resulting from an increase in the value of our minority equity interest in Vesta.

Expenses were $52 million, down slightly from $55 million in the prior quarter and up from $47 million in the second quarter of 2025. The decrease from the prior quarter was driven primarily by lower marketing and advertising expenses, as the prior quarter contained elevated expenses related to the 2026 Winter Olympics. The increase from the second quarter of 2025 was primarily driven by higher marketing and advertising expenses and legal expenses.

Management’s slide presentation and accompanying material will be available in the Investor Relations section of the Company’s website at pfsi.pennymac.com after the market closes on Wednesday, July 29, 2026. Management will also host a conference call and live audio webcast at 5:00 p.m. Eastern Time to review the Company’s financial results. The webcast can be accessed at pfsi.pennymac.com, and a replay will be available shortly after its conclusion.

About PennyMac Financial Services, Inc.

PennyMac Financial Services, Inc. is a specialty financial services firm focused on the production and servicing of U.S. mortgage loans and the management of investments related to the U.S. mortgage market. Founded in 2008, the company is recognized as a leader in the U.S. residential mortgage industry and employs approximately 5,500 people across the country. For the twelve months ended June 30, 2026, PFSI’s production of newly originated loans totaled $151 billion in UPB, making it a top lender in the nation. As of June 30, 2026, PFSI serviced loans totaling $731 billion in UPB, making it a top mortgage servicer in the nation. Additional information about PFSI is available at pfsi.pennymac.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections, and assumptions with respect to, among other things, our financial results, future operations, business plans and investment strategies, as well as industry and market conditions, all of which are subject to change. Words like “believe,” “expect,” “anticipate,” “promise,” “project,” “plan,” and other expressions or words of similar meanings, as well as future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” are generally intended to identify forward-looking statements. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: interest rate changes; changes in macroeconomic, consumer and real estate market conditions; changes in housing prices, housing sales and real estate values; rising homeownership costs negatively impacting housing affordability; the continually changing federal, state and local laws and regulations applicable to our highly regulated industry; lawsuits or governmental actions resulting from noncompliance with laws and regulations; the mortgage lending and servicing-related regulations promulgated by federal and state regulators and the enforcement of these regulations; licensing and operational requirements of jurisdictions applicable to our business, to which our bank competitors are not subject; our ability to close and integrate acquisitions, including the acquisition of Cenlar’s subservicing business, changes to government modification programs; difficulties inherent in adjusting the size of our operations to reflect changes in business levels; purchase and sales opportunities for mortgage servicing rights; our substantial amount of indebtedness; increases in loan delinquencies, defaults and forbearances; foreclosure delays and changes in foreclosure practices; our dependence on U.S. government-sponsored entities and changes in their roles; our ability to manage third-party vendors and mortgage investor requirements; our exposure to counterparties that do not fulfill contractual obligations; our reliance on PennyMac Mortgage Investment Trust (NYSE: PMT) as a significant contributor to our mortgage banking business; maintaining sufficient capital and liquidity and compliance with financial covenants; our obligation to indemnify third-party purchasers or repurchase loans if loans that we originate, acquire, service or assist in the fulfillment of, fail to meet certain criteria; our obligation to indemnify PMT if our services fail to meet certain criteria or characteristics or under other circumstances; investment management and incentive fees; the accuracy or changes in the estimates we make about uncertainties, contingencies and asset and liability valuations; conflicts of interest in allocating our services and investment opportunities among us and our advised entity; our ability to mitigate cybersecurity risks, cyber incidents and technology disruptions; our ability to implement and develop new technologies and artificial intelligence ; the effect of public opinion on our reputation; our exposure to risks of loss and disruption in operations from severe weather events, man-made or other natural conditions, including climate change and pandemics; our ability to effectively identify, manage and hedge our credit, interest rate, prepayment, liquidity and climate risks; expansion of new business activities or strategies; our ability to detect misconduct and fraud; our ability to pay dividends to our stockholders; and our organizational structure and certain requirements in our charter documents. You should not place undue reliance on any forward- looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, and the statements made in this press release are current as of the date of this release only.

The press release contains financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”), such as adjusted net income, adjusted net revenue, adjusted earnings per share, pretax income excluding valuation-related items, and adjusted return on equity. Adjustments to GAAP financial measures include items that the Company deems non-operating, non-recurring and market-driven fair value adjustments to Mortgage Servicing Rights (MSRs) and associated hedging results that change based on interest rate shifts rather than operational efficiency. These non-GAAP measures provide a meaningful perspective on the Company’s business results because the Company utilizes this information to evaluate and manage the business, and investors use this information to calculate financial and cash flow measures. These non-GAAP measures have limitations as analytical tools and should not be viewed as a substitute for financial information determined in accordance with GAAP. Furthermore, these non-GAAP measures may not be comparable to similarly titled metrics presented by other financial institutions.

Consolidated Statements of Income

($ in millions, except per share amounts)

2Q26

1Q26

4Q25

3Q25

2Q25

Y/Y

Revenue

Owned servicing fees

471

469

463

460

436

Subservicing fees

(6)%

Ancillary and other fees

(10)%

Total loan servicing fees

536

532

535

507

Realization of MSR cash flows

(323)

(355)

(383)

(290)

(263)

23%

Changes in fair value of MSRs due to changes in fair value inputs

118

183

(102)

N/M

Hedging results

(186)

(207)

(39)

(109)

N/M

Net servicing income

146

153

150

241

150

(3)%

Net gains on loans held for sale

280

345

302

314

235

19%

Loan origination fees

18%

Fulfillment fees from PMT

(14)%

Interest income

242

208

264

249

222

Interest expense

(271)

(250)

(263)

(250)

(240)

13%

Net interest (expense) income

(28)

(42)

(1)

(18)

60%

Management fees

(1)%

Other revenues

N/M

Total net revenues

497

545

538

633

445

12%

Expenses

Compensation

223

216

208

205

188

19%

Technology

Mortgage loan origination

36%

Professional services

90%

Servicing

50%

Occupancy and equipment

28%

Marketing and advertising

36%

Other expenses

50%

Total expenses

465

440

404

397

368

26%

Income before provision for (benefit from) income taxes

105

134

236

(59)%

Income taxes

(60)

N/M

Net income

107

182

136

(84)%

Weighted average shares outstanding

Basic

51.9

52.1

52.0

51.7

Diluted

53.3

53.9

54.2

53.9

53.6

(1)%

Earnings per share

Basic

$ 0.42

$ 1.58

$ 2.05

$ 3.51

$ 2.64

(84)%

Diluted

$ 0.41

$ 1.53

$ 1.97

$ 3.37

$ 2.54

(84)%

Cash dividends declared per common share

$ 0.30

May not sum due to rounding

Non-GAAP Reconciliations

($ in millions, except per share amounts)

Reconciliation of GAAP Total net revenues to Adjusted net revenues

2Q26

1Q26

4Q25

3Q25

2Q25

Total net revenues

497

545

538

633

445

Increase (decrease) in fair value of MSRs and MSLs due to changes in valuation inputs used in the valuation model

118

183

(102)

Hedging gains (losses) associated with MSRs (1)

(187)

(221)

(37)

105

(112)

Provision for credit losses on active loans

(8)

(6)

(11)

(0)

Non-recurring revenues (2)

Adjusted net revenues

566

589

546

630

537

May not sum due to rounding

(1) Includes principal-only stripped MBS valuation-related accretion changes included in interest income for GAAP purposes

(2) 2Q26 non-recurring revenues consist of a $9 million valuation gain related to investments in closely held entities

Reconciliation of GAAP Net Income to Adjusted net income,

Adjusted diluted EPS and Adjusted return on equity (ROE)

2Q26

1Q26

4Q25

3Q25

2Q25

Net income

107

182

136

(Increase) decrease in fair value of MSRs and MSLs due to changes in valuation inputs used in the valuation model

(118)

(183)

(40)

102

(16)

Hedging (gains) losses associated with MSRs (1)

187

221

(105)

112

Provision for (reversal of) losses on active loans

(4)

Non-recurring pretax items (2)

(7)

Total adjustments:

(3)

Tax rate for adjustments

25.1%

25.2%

Tax impacts of adjustments

(18)

(12)

(2)

(23)

Non-recurring tax adjustment

(82)

Adjusted net income

118

113

180

124

Diluted shares outstanding

53.5

53.9

54.2

53.9

53.6

Adjusted diluted EPS

$ 1.39

$ 2.19

$ 2.08

$ 3.33

$ 2.31

Average stockholders' equity

4,323

4,324

4,238

4,110

3,940

Annualized return on equity (ROE)

10%

18%

14%

Annualized adjusted ROE

11%

17%

13%

May not sum due to rounding

(1) Includes principal-only stripped MBS valuation-related accretion changes included in interest income for GAAP purposes

(2) 2Q26 non-recurring pretax items include a $9 million valuation gain related to investments in closely held entities and $1 million of Cenlar acquisition related expenses

Non-GAAP Reconciliations (continued)

($ in millions)

Reconciliation of GAAP Net income to Adjusted EBITDA

2Q26

1Q26

4Q25

3Q25

2Q25

Net income

107

182

136

Provision for (benefit from) income taxes

(60)

Income (loss) before provisions for income taxes

105

134

236

Depreciation and amortization

(Increase) decrease in fair value of MSRs and MSLs due to changes in valuation inputs used in the valuation model

(118)

(183)

(40)

102

(16)

Hedging (gains) losses associated with MSRs (1)

187

221

(105)

112

Provision for (reversal of) losses on active loans

(4)

Stock-based compensation

Non-recurring items (2)

(7)

Interest expense on corporate debt and capital lease

Adjusted EBITDA

204

251

246

335

261

May not sum due to rounding

(1) Includes principal-only stripped MBS valuation-related accretion changes included in interest income for GAAP purposes

(2) 2Q26 non-recurring pretax items include a $9 million valuation gain related to investments in closely held entities and $1 million of Cenlar acquisition related expenses

Reconciliation of GAAP servicing pretax income to

servicing pretax income net of valuation related changes

2Q26

1Q26

4Q25

3Q25

2Q25

Servicing pretax income

157

(Increase) decrease in fair value of MSRs and MSLs due to changes in valuation inputs used in the valuation model

(118)

(183)

(40)

102

(16)

Hedging (gains) losses associated with MSRs (1)

187

221

(105)

112

Provision for (reversal of) losses on active loans

(4)

Servicing pretax income net of valuation related changes

155

146

May not sum due to rounding

(1) Includes principal-only stripped MBS valuation-related accretion changes included in interest income for GAAP purposes

Production Segment Profitability and Key Metrics

($ in millions)

Production Segment Contribution to Pretax Income

2Q26

1Q26

4Q25

3Q25

2Q25

Y/Y

Net gains on loans held for sale at fair value

245

311

276

280

204

20%

Loan origination fees

18%

Fulfillment fees from PMT

(14)%

Interest income

119

113

129

111

104

14%

Interest expense

(105)

(96)

(109)

(98)

(94)

12%

Net interest income

35%

Other revenues

N/M

Net revenues

337

407

371

362

280

21%

Compensation

146

136

123

114

104

40%

Technology

Loan origination expenses

36%

Professional Services

42%

Occupancy and equipment

50%

Marketing and advertising

18%

Other expenses

N/M

Expenses

299

273

244

239

222

35%

Pretax income

134

127

123

(33)%

May not sum due to rounding

Production Segment Profitability and Key Metrics (continued)

($ UPB in billions)

Production Segment Volumes and Key Metrics

2Q26

1Q26

4Q25

3Q25

2Q25

Y/Y

Volumes

Consumer direct fallout adjusted locks

4.5

6.6

5.0

3.9

2.4

87%

Broker direct fallout adjusted locks

6.5

7.1

5.6

5.9

5.4

21%

Correspondent fallout adjusted locks

20.5

24.3

30.5

27.2

30.8

(33)%

Total fallout adjusted locks

31.5

38.0

41.0

37.0

38.6

(18)%

Consumer direct originations

5.6

6.0

5.2

3.1

2.8

103%

Broker direct originations

7.0

6.7

6.5

5.6

5.3

32%

Correspondent acquisitions

22.3

24.4

30.5

27.8

29.8

(25)%

Total acquisitions and originations

34.9

37.0

42.2

36.5

37.9

(8)%

Consumer direct locks

6.1

9.2

7.4

6.0

3.8

62%

Broker direct locks

8.5

9.5

7.6

8.0

7.2

19%

Correspondent locks

21.8

26.1

31.8

29.3

32.2

(32)%

Total locks

36.5

44.8

46.8

43.2

43.1

(15)%

Key Metrics

Revenues (1) as basis points

of fallout adjusted locks

Pretax income as basis points

of total fallout adjusted locks

(3)

Consumer direct margins (2)

3.17%

2.67%

2.74%

3.28%

4.08%

(22)%

Broker direct margins (2)

1.04%

0.99%

1.01%

0.97%

0.87%

19%

PFSI correspondent margins (2)

0.29%

0.28%

0.25%

0.30%

0.25%

15%

% Purchase acquisitions and originations

69%

58%

66%

83%

N/M

Government loan first lien

refinance recapture rate (3)

59%

50%

51%

48%

44%

15%

Conventional loan first lien

refinance recapture rate (3)

29%

22%

17%

16%

17%

12%

WA FICO at acquisition / origination

742

749

747

749

746

(4)

WA DTI at acquisition / origination

(1)

May not sum due to rounding

(1) Net of loan origination expenses

(2) Revenue contribution excluding post-lock impacts divided by fallout adjusted locks

(3) Numerator = UPB of new consumer direct first lien refinance originations for existing portfolio customers; denominator = UPB of payoffs with no transfer of title or MLS listing identified

Servicing Segment Profitability and Key Metrics

($ in millions)

Servicing Segment Contribution to Pretax Income

2Q26

1Q26

4Q25

3Q25

2Q25

Y/Y

Owned servicing fees

471

469

463

460

436

Subservicing fees

(6)%

Ancillary and other fees

(10)%

Total loan servicing fees

536

532

535

507

Realization of MSR cash flows

(323)

(355)

(383)

(290)

(263)

23%

Changes in MSR fair value due to changes in valuation inputs

118

183

(102)

N/M

Hedging results

(186)

(207)

(39)

(109)

N/M

Net loan servicing fees

146

153

150

241

150

(3)%

Gains on loans held for sale

15%

Interest income

123

135

137

117

Interest expense

(166)

(154)

(152)

(146)

14%

Net interest expense

(43)

(59)

(19)

(15)

(29)

48%

Other revenues

(2)

(1)

N/M

Net revenues

137

125

154

259

153

(11)%

Compensation

Technology

(11)%

Servicing

50%

Other expenses

20%

Expenses

115

112

117

102

16%

Servicing pretax income

157

(60)%

May not sum due to rounding

Servicing Segment Profitability and Key Metrics (continued)

($ UPB in billions)

Servicing Segment Portfolio and Key Metrics

2Q26

1Q26

4Q25

3Q25

2Q25

Y/Y

Servicing Portfolio

($ UPB in billions, at period end)

Owned MSR UPB

488

474

462

470

463

Subserviced UPB

235

237

263

239

230

Loans held for sale

13%

Total UPB

731

720

734

717

700

Total loans serviced (in thousands)

2,753

2,725

2,788

2,746

2,704

Key Metrics

(owned portfolio, at period end except CPR)

60+ Day Delinquency

4.1%

4.2%

3.4%

3.2%

0.9%

Actual CPR

11.6%

13.7%

13.0%

8.6%

8.5%

3.1%

Weighted average coupon

5.1%

5.0%

4.9%

4.7%

0.4%

Weighted average servicing fee

0.39%

0.00%

Servicing fee multiple

5.6x

5.5x

5.3x

0.3x

May not sum due to rounding

Corporate & Other Profitability

($ in millions)

2Q26

1Q26

4Q25

3Q25

2Q25

Y/Y

Management fees

(1)%

Interest income

N/M

Interest expense

N/M

Net interest income (expense)

N/M

Other revenues

N/M

Net revenues

98%

Compensation

(21)%

Technology

(3)

20%

Marketing and advertising

170%

Professional Services

180%

Occupancy and equipment

28%

Other expenses

34%

Expenses

10%

Corporate & Other pretax loss

(29)

(42)

(30)

(44)

(35)

(19)%

May not sum due to rounding

Consolidated Balance Sheets

($ in millions)

6/30/26

3/31/26

12/31/25

9/30/25

6/30/25

Y/Y

Assets

Cash

214

220

302

622

162

32%

Short-term investment at fair value

534

434

410

462

16%

Principal-only stripped mortgage-backed securities at fair value

609

659

723

774

785

(22)%

Loans held for sale at fair value

7,820

9,954

9,123

7,490

6,961

12%

Derivative assets

202

283

188

202

181

12%

Servicing advances, net

589

623

590

396

431

37%

Mortgage servicing rights at fair value

10,587

10,149

9,599

9,654

9,531

11%

Loans eligible for repurchase

8,291

8,594

7,410

5,417

4,963

67%

Other assets

1,013

1,028

1,045

783

746

36%

Total Assets

29,859

31,944

29,389

25,401

24,222

23%

Liabilities

Assets sold under agreements to repurchase

8,435

10,178

8,794

7,130

7,344

15%

Mortgage loan participation purchase and sale agreements

696

691

697

699

700

(1)%

Notes payable secured by mortgage servicing assets

1,426

1,326

1,327

Unsecured senior notes

4,837

4,834

4,832

4,829

4,185

16%

Accounts payable and accrued expenses

437

459

644

476

395

11%

Income taxes payable

1,216

1,206

1,184

1,151

1,097

11%

Liability for mortgage loans eligible for repurchase

8,291

8,594

7,410

5,417

4,963

67%

Other liabilities

184

229

194

164

178

Total Liabilities

25,523

27,618

25,080

21,193

20,189

26%

Stockholders' Equity

4,337

4,326

4,309

4,208

4,033

May not sum due to rounding

Capital and Liquidity

($ in millions)

2Q26

1Q26

4Q25

3Q25

2Q25

Y/Y

Liquidity

Cash and short-term investments

749

654

712

684

624

20%

Amounts available to draw on facilities with collateral pledged

3,261

3,507

3,928

4,288

3,538

(8)%

Total liquidity

4,010

4,161

4,639

4,972

4,163

(4)%

Total liquidity as a % of MSR fair value

38%

41%

48%

52%

44%

(6)%

Capital

Total equity

4,337

4,326

4,309

4,208

4,033

(-) Capitalized software

111

112

108

105

112

(1)%

Tangible equity

4,226

4,214

4,201

4,103

3,920

Face value of unsecured senior notes

4,900

4,250

15%

Face value of MSR term notes and loans

1,330

1,230

Amount drawn on variable funding note

1,145

860

410

230

905

27%

Freddie Mac MSR facilities

310

235

100

210%

Face value of non-funding debt

7,685

7,325

6,640

6,460

6,485

19%

Face value of assets sold under agreements to repurchase (1)

7,085

9,189

8,391

6,908

6,447

10%

Face value of mortgage loan participation purchase and sale agreements

696

691

697

700

701

(1)%

Face value of funding debt

7,782

9,880

9,088

7,608

7,148

Face value of total debt

15,467

17,205

15,728

14,068

13,633

13%

Unamortized debt issuance costs

(72)

(76)

(80)

(84)

(76)

(6)%

Carrying value of total debt

15,395

17,129

15,648

13,984

13,557

14%

Total assets

29,859

31,944

29,389

25,401

24,222

23%

(-) Capitalized software

111

112

108

105

112

(1)%

Adjusted assets

29,748

31,832

29,281

25,296

24,110

23%

(-) Loans eligible for repurchase

8,291

8,594

7,410

5,417

4,963

67%

Adjusted assets less loans eligible for repurchase

21,458

23,237

21,871

19,879

19,147

12%

Capital Ratios

Non-funding debt / total equity (2)

1.8x

1.7x

1.5x

1.6x

0.2x

Non-funding debt / tangible equity (2)

1.8x

1.7x

1.6x

1.7x

0.2x

Total debt / total equity

3.6x

4.0x

3.7x

3.3x

3.4x

0.2x

Total debt / tangible equity

3.7x

4.1x

3.7x

3.4x

3.5x

0.2x

Total equity / adjusted assets less loans eligible for repurchase

20.2%

18.6%

19.7%

21.2%

21.1%

(0.8)%

Tangible equity / adjusted assets less loans eligible for repurchase

19.7%

18.1%

19.2%

20.6%

20.5%

(0.8)%

May not sum due to rounding

(1) Assets sold under agreements to repurchase shown above excludes the amount drawn on variable funding note and a certain portion of the Freddie Mac MSR facilities

(2) Uses face value of debt outstanding